China in Africa: The Real Story

At the end of summer, when the Western world pauses, I am catching up on some China-Africa reading. One piece I missed dates from August 2010: an article in China Monitor by Jesse Salah Ovadia, a York University (Canada) Ph.D. student who did fieldwork in Angola. His comments on his interviews with US government officials in Angola were illuminating, and disturbing:

In an interview I conducted with an American diplomat in Angola – carried out as part of a wider research project - he repeatedly denigrated the quality of Chinese infrastructure projects in the country and argued that the Chinese "don‘t have any interests here other than resource extraction. ... It‘s plain and simple. They are just here for the resources. They are not interested in the country‘s well-being, only in extracting what they need economically." ...

...The diplomat went on to insist that the United States espouses a much more holistic set of interests than China: "Yes, Angola is the sixth largest supplier of oil to the U.S., but that is not the sum total of our relationship. We still promote democracy and human rights, and our goal is free, secure, and peaceful relationship with Iraq—I mean Angola."

Iraq? An interesting little slip, that.

What about our holistic set of interests? In 2009, according to budget documents, the US allocated $56 million in aid to Angola -- mainly global health and child survival. We gave nothing under "feed the future" for agriculture and food security, $2 million for basic education, $4 million for family planning/reproductive health, $14.7 million for HIV/Aids, $30 million for malaria, $2 million for micro-enterprises, $300,000 for trade capacity building, $3 million for water funding, and apparently nothing for general infrastructure (roads, electricity). I didn't see anything specifically for democracy and human rights, either.

That same year, according to the International Energy Agency, the US imported about $10 billion in petroleum from Angola, and $18 billion in 2008.

China's official aid to Angola has also financed malaria initiatives, and health, but has been modest. Where the Chinese make the difference is in using a portion of their oil imports to secure major infrastructure loans that have built massive reconstruction infrastructure in Angola. Between 2004 and today, this has amounted to $10 billion (mainly oil-backed), with another $1.5 billion line of credit to be focused on development in agriculture, from China Development Bank, and $2.5 billion from a commercial bank, ICBC (the latter two are not oil-backed).

None of this Chinese finance should be considered "official development assistance" as it is offered without subsidies, at LIBOR rates. But it does support development. So a lot of China's oil imports from Angola are used to finance Angolan development, but that's not the case for us. (Of course there is the Hong Kong-based syndicate that controls the China International Fund which is doing far less development and reaping far more profit from its cozy relations with Angolan elites. This was covered pretty well by the Economist in a recent article). But that is a separate issue.

What about the impact of this infrastructure finance? Ovadia said:

China‘s new role in Angola has brought the financing needed for the country‘s reconstruction and significant investment has been made in key sectors of the economy. Journeys that once took most of a day can now be completed in a few hours and neighbourhoods are being connected to national power grids for the first time... there is little doubt that the projects are having a major impact on the country.

In a footnote, Ovadia adds:

The diplomat‘s comments were somewhat contradicted a few weeks later at a public forum in Luanda on the role of China in Angola when an American defence attaché from the embassy commented publically that China was trying to create "a new slave empire in Africa,"* demonstrating that the 'extreme-China threat‘ position is still alive and well.

This is why I speak to the State and Defense Departments whenever they invite me (I regret expressing some hesitation to speak to the CIA when one of their officials approached me informally -- they never followed up with an invitation). Washington: I'm ready to present a different, empirically based, a bit wonky, but, I hope, more balanced perspective, if you're ready to hear it.

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*Perhaps he was simply quoting the title of a newspaper article published by Peter Hitchens a few years ago in the UK?